Analysis of the Nature and Legal Effects of Self-Executing Contracts in an AI-Based Comparative Context: From Autonomy of Will to Algorithmic Autonomy

Abstract

The expansion of intelligent systems in contractual relations, particularly in the form of self-executing contracts, has introduced a significant transformation in private law. In such contracts, part of the performance of obligations—and even decision-making processes related thereto—is delegated to algorithm-based systems. This development raises critical questions regarding the legal nature of system-generated decisions, the possibility of attributing intent to such systems, the validity limits of changes arising from automated decisions, and the basis of liability in the event of damage. The central issue of this study is whether, under Iranian law, independent legal effects can be attributed to decisions made by intelligent systems, or whether such decisions are merely acceptable as tools for executing human intent. Accordingly, the main research question concerns the legal status of algorithmic decisions in self-executing contracts and the basis upon which liability arising from system performance can be explained. The research hypothesis posits that intelligent systems lack intention and will, and therefore cannot possess contractual agency; consequently, the validity of their decisions depends on their conformity with the prior agreement of the parties, and in cases of deviation, the resulting effects are attributable to the user or designer of the system. In high-risk situations, a risk-based liability framework may also be applied. The research adopts a descriptive-analytical method based on library research, utilizing jurisprudential sources, domestic laws, and comparative legal documents to analyze the subject. The findings indicate that general principles of contract law, particularly the principle of freedom of contract, have the capacity to accommodate self-executing contracts; however, in order to eliminate ambiguity in defining the limits of system decision-making, ensure the possibility of judicial oversight, and achieve a fair distribution of liability, it is necessary to formulate supplementary regulations concerning the scope of system authority, requirements of operational transparency, and an appropriate liability regime.